Carbon Trading

Global warming has spawned a new form of commerce: the carbon trade. This new economic activity involves the buying and selling of “environmental services,” including the removal of greenhouse gases from the atmosphere, which are identified and purchased by eco-consulting firms and then sold to individual or corporate clients to “offset” their polluting emissions. While some NGOs and “green” businesses favor the carbon trade and view it as a win-win solution that reconciles environmental protection with economic prosperity, other environmentalists and grassroots organizations claim that it is no solution to environmental problems such as global warming.

Carbon is the common denominator in all-polluting gases that cause global warming. Carbon dioxide is the gas most commonly thought of as a greenhouse gas; it is responsible for about half of the atmospheric heat retained by trace gasses. It is produced primarily by burning of fossils fuels and deforestation accompanied by burning and biodegradation of biomass. Analyses of gas trapped in polar ice samples indicate that pre-industrial levels of CO2 in the atmosphere was approximately 260 parts per million. Over the last 300 years, this level has increased to current value of around 375 ppm; most of the increase by far has taken place at an accelerating pace over the last 100 years. About half of the increase in carbon dioxide in the last 300 years can be attributed to deforestation, which still accounts for approximately 20% of the annual increase in this gas. It is estimated that if the carbon increases in the atmosphere at the present rate and no positive efforts are pursued, the level of carbon in the atmosphere would go up to 800–1000 ppm by the end of current century, which may create havoc for all living creatures on earth (Current science, vol 91, No. 7,10 October 2006).

Various firms scour the world in search of environmental services that could offset its client’s emissions. These services are usually forests and tree-planting projects and are known in the business as carbon assets or carbon sinks, because trees remove carbon from the atmosphere and sequesters it in their wood. The activity of these sinks is often called carbon sequestration.

Using a variety of methodologies, the environmental services broker arrives at an estimate of how much carbon a particular sink sequesters, and then assigns it a monetary value and sells it to a client. The client then subtracts from its carbon account the carbon sequestered by its newly purchased carbon sink. The client is said to be carbon-neutral or climate-neutral when its carbon assets equal its carbon emissions.

Two examples of environmental services brokers in the carbon trade are Climate Care and Future Forests. The London-based Climate Care is a non-profit organization that sells carbon offsets to individuals and companies and uses the money to invest in climate-friendly projects, like wilderness protection in Uganda, energy efficiency in the Indian Ocean island state of Mauritius, and small-scale hydropower in Bulgaria. Its corporate clients are mostly travel agencies like Ecotours, Whale Watch Azores, Nature Trek, and Andante.

The for-profit Future Forests, also based in England, says on its web page: “We help you to see how much CO2 is produced by the things you do, and suggest ways you can reduce those emissions. What you can’t reduce, we can neutralize (or ‘offset’) for you—by planting trees that reabsorb CO2 and by investing in projects that cut down CO2 emissions, such as those which use renewable energy sources.”

However, some environmental organizations believe that the activities of these two institutions are no help to world climate, and they released a joint communiqué on this matter in May 2004.

Heidi Bachram of Carbon Trade Watch: “These companies are indirectly blocking the real solution to global warming, which is reducing and finally halting fossil fuel burning. The idea that people can burn fossil fuels and then plant trees to clean up the carbon dioxide which results is simply wrong. This false ‘solution’ will merely keep people digging up oil and coal, instead of trying to shift to clean energy.”

“The real solution is the conservation of energy, the reduction of consumption, a more equitable use of resources and equitable development and distribution of clean and renewable low impact energy sources,” (The World Rainforest Movement).